According to the local news media, Japan Economic News, Sunday, the Financial Services Agency (FSA) of Japan expects to approve the release of the country's first fixed currency peg to the yen as early as the autumn of this year. This approval was given to JPYC, a financial technology company based in Tokyo, with the same name as the stabilization currency. It is reported that the company plans to register with FSA as a money transfer business in August and is expected to initiate token sales in the week following registration.
To support its linkage to the yen, JPYC stabilization currency will be supported by high-liquid assets such as deposits and government bonds. Potential applications include international remittances, business payments and decentralised finance (DeFi). JPYC plans to issue a stabilization currency worth 1 trillion yen (approximately $6.78 billion) over the next three years. Reports also indicate that JPYC has attracted several hedge funds that have shown interest in this currency.
Japan has taken initial steps in the area of currency stabilization regulation. In June 2022, the Diet of Japan adopted an amendment to the Act on Payment Services, recognizing a stable currency linked to a statutory currency as an “electronic means of payment”. The amendment also provides that only licensed banks, service providers and trust companies may issue such stable currency. The following year, the country formally defined the stable currency as a “currency-denominated asset”.
Since then, several key players in the local financial community have also begun to become involved in the area of stabilization currency. This includes the Bank of Japan’s second-largest bank, the Samai Suai Friends Finance Group (SMBC), which announced earlier this year its plan to launch a stabilization currency in collaboration with Ava Labs and Fireblocks.